Lion Nathan's improved Australian half-year profits failed to negate the impact of price wars in New Zealand and continued losses from its China operations. The result is a flat $83 million.
Management is however optimistic that second half results will be improved on the back of a rejuvenationof core brands which will underpin stronger volume performance.
It will also try to drive growth in key segments such as low alcohol and premium. Price rises are expected to deliver improved second half margins.
Warburg Dillon Read's analyst James Gore said although Lion Nathan continued to enjoy steady cashflow and stable growth, the stock was unlikely to outperform the market's performance.
Lion's chief financial officer Paul Lockey said the planned sale of its share in the Australian bottling joint venture with Pepsi could pave way for a capital repayment.
Overall Australian earnings were up 7.8 per cent while New Zealand earnings dipped 12.4 per cent.
Losses in China were 19.3 per cent higher from the last period while soft drinks earnings improved 19.3 per cent.
The company has announced an interim dividend of 8 cents per share, payable on June 8.
The dividend carries a 60 per cent imputation credit against none declared for the same period last year.
Lion's overall market share in Australia dipped to 41.1 per cent from 41.5 per cent as a result of market erosion in Western Australian, due to intense competition for sales of mid-strength beer.
But second quarter trend was improving, with strong share growth seen in New South Wales while Queensland and South Australia held stable, the company said.
Margins for Australian half-year earnings improved to 27.3 per cent from 26.8 per cent a year ago.
In New Zealand, market share improved to 61.4 per cent from 61.1 per cent. But the total Kiwi beer market fell 1.4 per cent on an annualised basis.
Lion Nathan is 45-per cent owned by Japan's Kirin Breweries.
